THE HOME LOAN PROCESS

DEMYSTIFYING HOME LOANS

If you haven’t experienced it before, the home loan process can feel overwhelming, but as your agent, I will help you stay informed throughout the process — from pre-approval to closing. The first thing to do is consult with a mortgage specialist (or two). If you don’t already have someone in mind, I can partner you with some of the best Houston lenders in the city, and I’d be more than happy to introduce you, so you’ll be taken care of.

GET PRE-APPROVAL!

Before you start looking for a home to buy, it’s a good idea to meet with your Loan Officer to get pre-approved for a loan amount. At this stage, the lender gathers information about income, assets and debts of the borrower (you) to determine how much house you may be able to afford. This includes a credit report, W-2 forms, pay stubs, Federal Tax Returns and recent bank statements. There are a variety of different loan programs, so make sure to get pre-qualification for the specific programs that best suit your needs.

PROCESSING

Once the Loan Officer has compiled your application and the documents needed, selected the proper paperwork for the loan program you requested, and have prepared your loan package for processing, the Processor will take over much of the work on your file.

The Processor will verify many of the items, such as income, employment, and assets before sending to the Underwriter. This requires phone verifications and many times the receiving of documentation from your employer. When applicable, a payoff will be ordered from the current mortgage holders(s), and a Title Search will be run to make sure all liens have been verified. Once this information has been verified, your file will be sent to the underwriter for approval.

Documents needed at application:

  • Most Current Pay Stub (30 Days)

  • Two Months of Current Bank Statements

  • Copy of Driver’s License

  • Two Years Recent Tax Returns (All Pages)

  • Most Recent Quarterly Statement for Retirement/Investment Funds

UNDERWRITING

The Underwriter is ultimately responsible for approving your home loan. Prior to submission to the Underwriter, we have already received a conditional approval from our automated underwriting system. The “live person” underwriter must verify and qualify your income, credit, cash reserves, and the property itself. If everything meets the guidelines stated for the program, a conditional approval will be granted, which will list the remaining items needed for the lender to issue funds to close the loan. In the home loan process, it is extremely important that the underwriter has all the documentation that builds a strong financial picture, because an underwriter’s job is on the line with every loan they approve. Therefore, if the Underwriter requests additional information, it is imperative that we provide it immediately.

APPRAISAL

The Appraiser’s job is to determine the fair market value of the home you are buying—or your current home if you are refinancing. Appraisers in Texas do this by verifying the physical characteristics of the house and land. This will be done through a personal inspection of the property to verify its condition, square footage, room count, construction materials used (brick, siding, etc.), and acreage. The appraiser will contact you to schedule the appraisal if it is a refinance, or contact the seller if it is a purchase. The cost of an appraisal for a single family home usually remains fairly standard in Texas, provided the property is not rural, hard to access, or of unusual size or acreage. The amount must be paid in advance, as appraisers are third party contractors and not part of our company.

LOCK YOUR RATE

Mortgage loan rates may change daily. To ensure that you receive the rate you were quoted, you may elect to lock in your rate by paying an up-front authorization fee. Your loan officer will educate you on the locking of the rate and provide all available options and loan programs.

ESCROW & TITLE

A title company will hold the money and documents until all conditions are satisfied. Title work will be prepared, including a title exam to ensure the title to the property is clear. Other title documents such as the mortgage note and deed will be prepared.

CLOSING & SIGNING

There are costs associated with processing and closing a mortgage loan, such as application fees, points, title, insurance, and credit processing. A closing agent will prepare and send loan closing documents package to the closing company and wires loan funds to the closing agent. When budgeting for your new home purchase, be sure to factor in closing costs (this cost will be provided to you in our free good faith estimate).

The documents will be sent to a title company for you and the seller to sign. Funds such as any remaining down payment and closing costs will be due at this time. Mortgage closing costs normally include such items as appraisal fees, title exam, settlement fees, title insurance, credit report fees, and application fees.

FUNDING & TITLE TRANSFER

When all funds are collected and the contract has been verified, the title is transferred and the purchase price funds are disbursed to the seller. After this step, you can take over the keys to your new home — CONGRAGULATIONS!